PHILIP LASKER: The Reserve Bank is expected to cut interest rates tomorrow but borrowers may not get the full benefit.

The official cash rate could drop by as much as half a per cent, but the banks say their borrowing costs have increased due to the global credit crunch, so they're unlikely to pass on the full amount.

We spoke to a number of economists what they expect.

RORY ROBERTSON, MACQUARIE GROUP: I think the Reserve Bank will cut by half a point to 6.5 per cent. I think that will probably cut by half a point once or twice more before Christmas well. The Reserve Bank is now cutting aggressively because it's more worried about recession than it is about inflation. In fact, the case is stronger tomorrow for a bigger cut, up to one percentage point than it is for a smaller cut. Because the global backdrop has deteriorated alarmingly over the months, in particular September, we had a massive intensification of the global turmoil all round the world. Banks increasingly are hunkering down not wanting to lend. So financial conditions have tightened dramatically across the world.

I think mortgage rates over nine per cent and business left handing rates over 10 per cent are inconsistent with ongoing growth in the Australian economy. The Reserve Bank is going to have to get those rates down significantly otherwise the market will go into recession.

AMY AUSTER, ANZ: Well the market's pricing in, and we're forecasting the Reserve Bank will cut the cash rate by 50 basis points tomorrow. The majority of forecasters have headed that direction. In terms of how much that is passed on I think that is something individual banks will be deciding. I think there is a good chance that at least some of that will be pass the on. Though perhaps not all of it.

What we're really trying to accomplish is making sure that the flow of credit into the economy continues at a sustainable pace, at a pace that supports growth and that includes not just the cash rate, but how much banks want to lend and are willing to lend.

BESA DEDA, ST. GEORGE: We think the RBA will tilt towards a larger half a per cent cut tomorrow and we think that a half a per cent cut is warranted given the deterioration in the credit markets and the growing down side risk to the global economy. We think they'll continue to assess the data closely but we think they'll follow up with another rate cut in November or December and with further easing early next year. The RBA will look at a range of indicators including the risk to growth and the risk to inflation. But I think on balance they will judge that that larger half a per cent cut is warranted.

SU-LIN ONG, RBC CAPITAL MARKETS: We think there is a good chance of a half percentage point cut in official rates. It largely reflects we think, the deterioration in the global credit crisis over the last month. A worsening in the global growth backdrop and what that means for us in Australia, the economy here is already slowing and it now looks like the global backdrop's faltering even more. That suggests there's still the possibility thereafter of further cuts and another quarter point before year end.

PHILIP LASKER: What's happening now is going to add to that argument of a half a per cent rate cut tomorrow.